Where’s the volatility in Shanghai Comp?

Bloomberg warns that margin debt on the Shanghai Stock Exchange “is sending equity volatility to five-year highs and may accelerate losses if a market reversal forces traders to sell.” The news service notes:

The outstanding balance of margin debt on the Shanghai Stock Exchange surpassed the trillion-yuan mark for the first time on Wednesday, a nearly fourfold jump from just 12 months ago. The city’s benchmark index has surged 86 percent during that time, more than any of the world’s major stock gauges.

Volatility spiked at year end, but immediately fell back below 10%. The spike in volatility that worries Bloomberg evidently was a year-ed burst of trading. Volatility on the SHCOMP remains comfortably in the same 5%-10% range in which it has traded since 2011.